Correlation Between 2G ENERGY and HF FOODS
Can any of the company-specific risk be diversified away by investing in both 2G ENERGY and HF FOODS at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining 2G ENERGY and HF FOODS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 2G ENERGY and HF FOODS GRP, you can compare the effects of market volatilities on 2G ENERGY and HF FOODS and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in 2G ENERGY with a short position of HF FOODS. Check out your portfolio center. Please also check ongoing floating volatility patterns of 2G ENERGY and HF FOODS.
Diversification Opportunities for 2G ENERGY and HF FOODS
Excellent diversification
The 3 months correlation between 2GB and 3GX is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding 2G ENERGY and HF FOODS GRP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HF FOODS GRP and 2G ENERGY is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on 2G ENERGY are associated (or correlated) with HF FOODS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HF FOODS GRP has no effect on the direction of 2G ENERGY i.e., 2G ENERGY and HF FOODS go up and down completely randomly.
Pair Corralation between 2G ENERGY and HF FOODS
Assuming the 90 days trading horizon 2G ENERGY is expected to generate 0.73 times more return on investment than HF FOODS. However, 2G ENERGY is 1.37 times less risky than HF FOODS. It trades about -0.1 of its potential returns per unit of risk. HF FOODS GRP is currently generating about -0.49 per unit of risk. If you would invest 2,465 in 2G ENERGY on November 27, 2024 and sell it today you would lose (120.00) from holding 2G ENERGY or give up 4.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
2G ENERGY vs. HF FOODS GRP
Performance |
| Timeline |
| 2G ENERGY |
| HF FOODS GRP |
2G ENERGY and HF FOODS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 2G ENERGY and HF FOODS
The main advantage of trading using opposite 2G ENERGY and HF FOODS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 2G ENERGY position performs unexpectedly, HF FOODS can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in HF FOODS will offset losses from the drop in HF FOODS's long position.| 2G ENERGY vs. NH HOTEL GROUP | 2G ENERGY vs. Summit Hotel Properties | 2G ENERGY vs. Hitachi Construction Machinery | 2G ENERGY vs. InterContinental Hotels Group |
| HF FOODS vs. Playtech plc | HF FOODS vs. Playa Hotels Resorts | HF FOODS vs. SLIGRO FOOD GROUP | HF FOODS vs. Nomad Foods |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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